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© 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Strategies to Optimize Costs using AWS
Amilcar Alfaro, Marketing Manager – Enterprise and Cloud Economics
May 26, 2016
What to expect….
We will introduce our approach for building the business case for moving to the cloud and share tips from some of our most innovative customers who are able to successfully architect for cost optimization in order to realize the economics of the AWS cloud.
In the beginning . . .
…there was TCO
Definition: Comparative total cost of ownership analysis (acquisition and operating costs) for running an infrastructure environment end-to-end on-premises vs. on AWS.
Used for:
Comparing the costs of running an entire infrastructure environment or specific workload on-premises or in a co-location facility vs. on AWS
Budgeting and building the business case for moving to AWS
What is TCO?
≠
So how do we do it?
TCO = acquisition costs + operations costs
Hardware—server, rack chassis PDUs, Tor
switches (+maintenance)
Software—OS, virtualization licenses
(+maintenance)
Facilities cost
Hardware—storage disks, SAN/FC switches Storage admin costs
Network hardware—LAN switches, load balancer
bandwidth costsNetwork admin costs
Server admin virtualization admin4
The diagram doesn’t include every cost item. For example, software costs can include database, management, and middle-tier software costs. Facilities cost can include costs associated with upgrades, maintenance, building security, taxes, and so on. IT labor costs can include security admin and application admin costs.
Space Power Cooling
Facilities cost
Space Power Cooling
Facilities cost
Space Power Cooling
Server costs
Storage costs
Network costs
IT labor costs
1
2
3
illustrative
Resources to get you started
AWS TCO Calculator https://awstcocalculator.com
Case studies and research http://aws.amazon.com/economics/
So you’re feeling pretty good.
Until your CFO shows up with the bill.
Cost optimization is…
going from…
pay for what you use
to…
pay for what you need
Where do you start?
Right-sizing Reserved Instances
Increase elasticity
Measure, monitor, and improve
The four pillars of cost optimization
Right-sizingRight-sizing Selecting the cheapest instance available while
meeting performance requirements Looking at CPU, RAM, storage, and network
utilization to identify potential instances that can be downsized
Leveraging Amazon CloudWatch metrics and setting up custom RAM metrics
Rule of thumb: Right size, then reserve.(But if you’re in a pinch, reserve first.)
Up to 75%+ savings*
(and capacity reservation)
Reserved Instances
Amazon EC2 Amazon RDS Amazon DynamoDB Amazon Redshift Amazon ElastiCache
Commitment level 1 year 3 year
AWS services offering RIs
* Dependent on specific AWS service, size/type, and region
Reserved InstancesStep 1: RI Coverage Cover always-on resources.
Rule of thumb: Target 70–80% always-on coverage and 95% RI utilization rate.
Step 2: RI Utilization Leverage RI flexibility to increase utilization. Merge and split RIs as needed.
Increase elasticityTurn off nonproduction instances Look for dev/test, nonproduction instances that are
running always-on and turn them off.
Rule of thumb: Shoot for 20–30% of Amazon EC2 instances running on demand to be able to handle elasticity needs.
Autoscale production Use Auto Scaling to scale up and down based
on demand and usage (for example, spikes).
Using right-sizing and elasticity to lower cost More smaller instances vs. fewer larger instances
29 m4.large @ $0.12 /hr$2,505.60 / mo*
59 t2.medium @ $0.052/hr$2,208.96 / mo*
*Assumes Linux instances in US-East at 720 hours per month
✔ ✔ ✔✔✘✘✘✘
Metrics and targets
Set up metrics to define success and track progress
% instances turned off daily % of instances right-sized % always-on resources covered by RIs % RI utilization
Putting it all together: case study
Challenge: Minimizing unit costs under period of massive growth.
A consistent measure of CPU processing power
Elastic compute unit (ECU)
The growth challenge
August 2014
584 ECU
August 2015
1,192 ECU2x YoY Compute Growth
33% decrease in monthly
EC2 costs!
Solving the growth challenge
Step 1: Right-size and update instances
m1 on demand$0.07 per ECU
c4 on demand$0.02 per ECU
The impact of right-sizing
70% reductionin unit cost
Step 2: Reserve
The impact of reservations
30% reductionIn unit cost
Putting it together
85% reductionin unit cost!
Sounds pretty easy, right?
Not really.
In reality, it is very complex. Scale Behavioral change Visibility Ownership
(Remember the fourth pillar?)Cost optimization governance
Uncovering the cost optimization opportunities
1. Auto-tag resources.2. Identify always-on nonprod.3. Identify instances to down-size.4. Recommend RIs to purchase.5. Dashboard our status.6. Report on savings.
AWS options
AWS Trusted Advisor Cost Explorer
Reserved Instances and right-sizing options
Example: reasonable optimization dashboard
Creating a culture of cost transparency
Targets and metrics
AWS Enterprise Support
Cloud Competency Center
© 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Name, Title
April 19, 2016
Partner PlaceholderPlaceholder
Putting it all together
Where to start
Set up a Cloud Competency Center
Bring in the right tools
Use metrics to reinforce behavior
Use partners to accelerate!
Cycle of cost optimization ✔ ✔
✔
✔
✘✘✘✘
$$$$$
Thank you!